The Comeback Keynes

Once derided, his ideas now dominate D.C.'s crisis tool kit. Not bad for a dead economist

Alfred Eisenstaedt / TIME&LIFE Pictures / Getty

Keynes, right, with U.S. Treasury Secretary Henry Morgenthau Jr. in 1944.

We are all Keynesians now. It's a phrase that entered public discourse as the headline of a TIME cover story in 1965. Now it's coming back into fashion.

This does not signify that we are all--as was Englishman John Maynard Keynes--Cambridge University economists with lucrative side jobs as investment managers, spectacular art collections, lots of famous friends and Russian-ballerina wives. At least I don't fit that description. Do you?

The resurgence of interest in Keynes also doesn't represent a full return to 1960s-style Keynesianism--the belief, shared by many economists and politicians in those days, that government could tame the business cycle...